Governor's Bill No. 5039 aims to enhance transparency and oversight regarding the distribution of legislatively directed funds by state agencies. The bill defines "legislatively directed funds" as appropriations authorized by the General Assembly for specific contracts or expenditures, excluding funds related to emergencies, state agencies, competitive awards, or those authorized by the State Bond Commission. The Secretary of the Office of Policy and Management is tasked with establishing policies for administering these funds, which include requirements for reimbursement-based distribution, recipient financial controls, and prior approval for subawards. Additionally, recipients and state agencies must submit annual reports detailing the use of these funds, which will be compiled into a publicly accessible database.

The bill also amends existing law by repealing certain provisions and inserting new language that clarifies the applicability of administrative procedures concerning the administration of legislatively directed funds. Specifically, it prohibits state agencies from entering into contracts for funds directed by the General Assembly unless a public or special act is enacted that specifies the entity receiving the funds and the intended use. This act is set to take effect on July 1, 2026, and aims to implement the Governor's budget recommendations while ensuring accountability in the distribution of state funds.